Management’s Discussion
and Analysis

Personal and Commercial Banking U.S. (P&C U.S.)

We serve nearly 1.3 million customers, working together with other Harris and BMO businesses in select U.S. Midwest markets to deliver clarity to our customers in the form of simplicity, guidance and financial know-how. Our retail and small business customers are served through 312 branches, an award-winning call centre, online banking and more than 880 automated banking machines. We deliver financial expertise to our commercial banking customers through a full range of lending products, in-depth specific industry knowledge and strategic capital markets solutions.

Image of Ellen Costello

“Our focus is on customers and their experience at Harris. We have a position in the market that is differentiated and supports long-term, profitable growth.”

Ellen Costello
President and
Chief Executive Officer
BMO Financial Corp. (formerly Harris Financial Corp.)

Our Strategies

  • Focus on acquiring new customers while capitalizing on attractive merger and acquisition opportunities.
  • Build the leading U.S. Midwest commercial bank, focused on acquiring and retaining high-quality clients.
  • Improve the effectiveness of our distribution capabilities, responding to evolving customer expectations.
  • Partner with Private Client Group to grow the wealth management business within our customer base.
  • Drive individual and team productivity through rigorous performance and talent management.

Our Path to Differentiation

  • A customer-focused culture centred on understanding and responding to our customers’ most important financial needs.
  • A one-team mindset that brings the entire organization’s capabilities to our customers.
  • Effective sales management and leadership that drive our sales and service employees to excel.
  • A disciplined, transparent performance management system that supports our business objectives, motivates employees and rewards top performance.
  • A strong brand signifying strength, stability and helpfulness.
Key Performance Metrics and Drivers 2010 2009 2008*

(1) Based on current loans.

(2) Excludes the impact of impaired loans, Visa and acquisition integration.

(3) A measure of the strength of customer loyalty. Commercial Banking does not have a comparable measure on a consolidated basis.

(4) Source: BMO Annual Employee Survey, conducted by Burke Inc., an independent research company.

  *  Loan and deposit growth and operating leverage in fiscal 2008 have not been restated for the impact of the 2010 portfolio transfer from BMO Capital Markets to P&C U.S.

Average US$ loan growth (%) (1) (14.1) (2.4) 10.8
Average US$ deposit growth (%) (1.1) 17.6 8.4
Operating leverage (US$) (%) (8.9) 1.8 (6.7)
Core operating leverage (US$) (%) (2) (4.5) 1.9 3.4
Number of branches 312 280 281
Personal Banking Net Promoter Score (3) 40 43 42
Serviced mortgage portfolio growth (%) 5.6 13.3 39.7
Employee engagement index (4) 71 74 74

Strengths and Value Drivers

  • A rich heritage of more than 125 years in the U.S. Midwest with the established Harris brand, a commitment to service excellence as demonstrated by our strong customer loyalty scores and a history of playing an active role in our customers’ local communities.
  • A comprehensive and increasingly integrated distribution network, supported by a differentiated customer experience.
  • A large-scale, relationship-based commercial banking business based in the U.S. Midwest, with in-depth industry knowledge in select sectors.
  • Strong working relationships with our partners in Private Client Group and BMO Capital Markets.
  • Ability to leverage the capabilities and scale of BMO Financial Group.


  • The economic outlook continues to be uncertain, with relatively slow improvement and modest expectations for increased loan demand in 2011.
  • Regulatory oversight has become increasingly complex with the advent of new regulations and compliance requirements.
  • Market dynamics remain competitive, as banks compete aggressively on pricing for both loans and deposits to maintain and increase market share.

Our Lines of Business

Personal Banking offers a full range of products and services to consumers and small businesses, including deposit and investment services, mortgages, consumer credit, small business lending and other banking services. We rank second in deposit market share in the Chicago area and have a significant presence in the other markets where we compete.

Commercial Banking provides mid-sized businesses with a broad range of banking products and services, including lending, deposits, treasury management and risk management. Segments of focus are business banking, corporate finance, diversified industries, financial institutions, food and consumer and commercial real estate. We also offer wealth management and investment banking services through our partners in Private Client Group and BMO Capital Markets.


This Personal and Commercial Banking U.S. section contains forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.